BANGKOK: Thailand's new government wants to set the minimum daily wage at US$10 -- an increase of nearly 30 per cent.

A guaranteed minimum wage for workers was a winning campaign strategy for Pheu Thai party, but implementing the policy could drive up production costs.

Small business owners said paying employees more would be reflected in prices consumers pay at the market.

In addition, they would need extra capital to cover expenses if business goes down.

Another worry is that foreign companies may relocate to where labour is cheaper.

Changes could take place closer to home as well.

Jitprapas Limited Partnership managing director Akarapat Tangtrongchit said: "I believe that workers from other countries will come and as SMEs (Small and Medium Enterprises), maybe we will hire workers from outside which give us lower salary."

He added this may mean Thai workers could be put out of work.

Some academics said that the policy would not fly with the business sector.

Independent academic Somjai Phagaphasvivat said: "It means that their enterprise could go under, Otherwise they have to change other tactics [such as hiring] foreign workers to compensate high cost of indigenous workers."

Some factory workers said they are finding it harder to get by, and expressed concern the situation could worsen.

They said government food subsidies or other relief measures would be preferable to a wage hike.

Factory worker Jaruwan Sucharit said: "My current income is not enough. If income is increased while cost of living, including transportation and other daily expenses remain the same, it will be good.

"But it is less likely that an income increase will not cause an overall higher cost of living."